Lendlease Annual Report 2022

Financial Statements 129 8. Finance Revenue and Finance Costs Accounting Policies Finance revenue is recognised as it is earned using the effective interest method, which applies the interest rate that discounts estimated future cash receipts over the expected life of the financial instrument. The discount is then recognised as finance revenue over the remaining life of the financial instrument. Finance costs include interest, amortisation of discounts or premiums relating to borrowings and amortisation of costs incurred in connection with the arrangement of new borrowings facilities. Costs incurred in connection with the arrangement of borrowings are capitalised and amortised over the life of the borrowings. Finance costs are expensed immediately as incurred unless they relate to acquisition and development of qualifying assets. Qualifying assets are assets that take more than six months to prepare for their intended use or sale. Finance costs related to qualifying assets are capitalised. June 2022 June 2021 $m $m Finance Revenue Other corporations 3 4 Other finance revenue 3 4 Total interest finance revenue 6 8 Interest discounting 3 1 Total finance revenue 9 9 Finance Costs Interest expense in relation to other corporations 113 127 Interest expense in relation to lease liabilities 17 20 Less: Capitalised interest finance costs 1 (25) (18) Total interest finance costs 105 129 Non interest finance costs 20 17 Total finance costs 125 146 Net finance costs (116) (137) 1. The weighted average interest rate used to determine the amount of interest finance costs eligible for capitalisation was 3.6 per cent (30 June 2021: 3.6 per cent), which is the effective interest rate.